See the health subsidy you’re about to lose — and the moves that can win it back.
If you're self-employed and near the 400% income cliff, the deductions that lower your MAGI can restore thousands in ACA premium subsidy. This tool computes what that would take — from your own income.
Early access this fall 2026. We’ll email you when it opens. No spam.
After withholding and estimated payments
These are example numbers. Run it on yours the day it opens.
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over the 400% FPL cliffby contributing $8,000/yr · plus $526 in income tax saved
Illustrative — an example self-employed household just over the 400% FPL cliff, computed by the same engine the tool runs. Your own numbers set the real position.
What this tool does
If you’re self-employed and buy health insurance through the ACA Marketplace, one number quietly controls thousands of dollars of your health costs: 400% of the federal poverty level. In 2026, earning a dollar over it can wipe out your premium subsidy entirely — the “subsidy cliff.”
This tool shows you, from your own numbers, where you stand relative to that cliff — and what it would take to get back under it. Enter your self-employment income, household size, and a few details, and it computes your position on the cliff, the deductions available to you that move it, and how much subsidy each would recover. And because your income isn't final until the year is — a strong final quarter or a late invoice can push you over — it tracks where you stand as your numbers change, so you can act while there's still time to, rather than find out at filing.
It's built for the person the cliff hits hardest: the freelancer, consultant, or small-business owner.
How the cliff works
Marketplace premium subsidies (the premium tax credit) are calculated on a sliding scale based on your household income relative to the federal poverty level (FPL). For the 2026 plan year, under current law, the subsidy is available up to 400% of FPL and disappears above it — a hard cutoff rather than a gradual phase-out. The exact threshold depends on your household size and where you live; you can confirm the current figures at healthcare.gov and the federal poverty guidelines.
Because the subsidy stops rather than tapers, two households a few hundred dollars apart in income can face very different health costs — one receiving thousands in assistance, the other nothing. That discontinuity is what makes it a cliff, and it's why a strong final quarter or a year-end invoice can cost far more than the income it added.
What actually moves your position
Your subsidy is based on your modified adjusted gross income (MAGI), not your gross revenue — and this is the detail that decides which moves work. Only deductions taken “above the line” reduce MAGI. Pre-tax retirement contributions (a Solo 401(k), SEP-IRA, or for higher earners a cash-balance plan), HSA contributions, and the self-employed health insurance deduction all qualify. Itemized deductions — mortgage interest, state and local taxes, most charitable giving — reduce your taxable income but not your MAGI, so they do nothing for the ACA cliff. It’s a common and expensive mix-up.
The tool weighs the MAGI-reducing options available in your situation, accounts for the ones you’re already using, and sizes the additional amount that would bring you back under the threshold. Near the cliff that can mean a contribution you were likely making anyway does double duty — funding your own retirement account and recovering health subsidy at the same time.
How it works, step by step
- 1Enter your situation — self-employment income, household size, age, and your benchmark premium (or let the tool estimate it).
- 2See your position — where your MAGI lands relative to your 400% FPL cliff, and how much subsidy is at stake.
- 3See what moves it — the MAGI-reducing options open to you, and how much subsidy each would recover.
- 4Adjust and explore — change a contribution or your income and watch your position and subsidy update.
- 5Track your position through the year — your income isn't final until the year is, so come back as it changes and see where you stand and the moves still available to you, while there's time to act.
The calculation handles an interaction most estimates miss: your health-insurance premiums are themselves deductible, so deducting them lowers your MAGI, which raises your subsidy — which in turn limits how much of the premium you're allowed to deduct. That loop is genuinely circular, and the IRS publishes a specific method for resolving it. Getting it wrong in either direction moves the answer by thousands, and near a cliff the difference between clearing it and missing by a few hundred dollars is the difference between a full subsidy and none.
Two things worth knowing about scope: the tool assumes you claim the subsidy at filing rather than as advance monthly payments, and it estimates your benchmark premium from your age unless you enter your own. Both are adjustable, and both are stated where they apply.
Who it's for (and who it isn't)
This is most valuable when you’re near the cliff — close enough that a realistic contribution can bring your MAGI under it. If you’re far over the threshold, no contribution can bridge the gap. If you’re comfortably under, you already qualify — but the tool still shows how much room you have and watches it through the year, so a strong season doesn’t quietly push you over the edge before you notice.